Surprisingly iPad's Drop In Sales Is Not Samsung's Gain, Welcome To Tablet Transformation

Over the past three years we've become accustomed to Apple and Samsung slugging it out at the top of the phone and tablet markets. This week's news that Apple suffered a slump in iPad sales would normally be accompanied by news of Samsung taking customers from Cupertino as it has done in spectacular fashion recently (in Q3 2013 Samsung tablet shipments grew 123%). Not this time round.

Apple slipped in a growing market while Samsung barely held its own. Both lost market share.

The first thing to note is that Apple has a plan to fight back. Tim Cook made the point in his earnings call that the new IBM partnership is expected to generate new enterprise-ready apps for the corporate tablet market. Along with IBM's channel sales capability he is obviously hoping to hold the line or even win back market share.

At the same time Cook is rallying new sectors around the iPhone (cars and health).

But if not Samsung then which companies are taking up the slack? The big gainer in tablets is Lenovo according to the IDC data.

Lenovo continued to climb the rankings ladder, surpassing ASUS and moving into the third spot in the tablet market, shipping 2.4 million units and grabbing 4.9% markets share. The top 5 was rounded out by ASUS and Acer, with 4.6% and 2.0% share, respectively.

But IDC also make the point that their "other" category is also growing. There are more vendors in the market and more are gaining traction. This section covers 37% of the market overall, which indicates a new phase in market dynamics.

Lenovo's market share is still small at just about 5% but growth hit 64% (compared with 13.1% for ASUS). Great Speculations made the point here on Forbes back in June that the growth in the tablet market seems to be coming from the low-price end, an area Apple wants to avoid, hence its enterprise strategy.

Lenovo Yoga 13 2 in 1 convertible PC (Photo credit: IntelFreePress)

But Lenovo's strategy is not just about selling cheap tablets. Nor is ASUS a low-cost entrant. While it has had a confusing approach to the US market, particularly its Windows tablets, Lenovo has been launching high-feature new products into fast developing markets like India. It is also explicit about a PC Plus strategy, selling laptop products alongside tablets as an integrated approach.

Given that the Mac increased sales in Q2, and a Gartner study in early July indicated a revival in the global PC market (after a 9% decline in 2013) Lenovo seems to be anticipating trends well. The Lenovo CEO, Yang Yuanqing, recently told the Harvard Business Review:

Now it’s not the PC era, it’s PC Plus era. So we want to win this Plus era. So we want to win in the mobile phone. We want to win the tablet. We want to win back in the server business. We want to become the new era leader, so in the PC Plus stage.

To master the tablet market over time you need to be in the PC business. Lenovo looks to be making the right calls.